S. 4080 — Rental Housing Investment Act

This section establishes a special depreciation allowance under new section 168(o) for qualified long-term residential rental property (i.e., depreciable new-construction residential rental buildings with at least two dwelling units, placed in service in the United States more than 12 months after enactment), if elected by the taxpayer. The allowance, deductible in the year placed in service, equals the lesser of $150,000 per dwelling unit or 100% of the property's adjusted basis excluding land ($250,000 per unit for projects meeting low-income housing tax credit eligibility requirements under section 42(g)(1)); the basis is reduced by the allowance amount for future depreciation, the deduction applies for alternative minimum tax purposes, and the property is treated as section 1245 property subject to recapture (10-year period generally; 15 years for affordable housing) if rental use ceases. (Thus, the provision incentivizes new multifamily rental housing development by allowing immediate expensing of construction costs, subject to use restrictions.)